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The United States will stick to the sanctions on Russian energy as long as Putin persists with his war in Ukraine and Washington looks to halve Moscow’s energy revenues by 2030, a senior U.S. official has told the Financial Times.
“This is something that we’re going to have to stick to for years to come, as long as Putin persists in this war,” Geoffrey Pyatt, United States Assistant Secretary of State for Energy Resources, told FT.
The U.S. has been leading the efforts of the G7 and the EU to impose sanctions and embargoes on Russian crude oil and fuel exports. The price cap of $60 per barrel of Russian crude oil says that Russian crude shipments to third countries can use Western insurance and financing if cargoes are sold at or below the $60-a-barrel ceiling. The measure took effect at the end of 2022 when the EU imposed an embargo on imports of Russian crude oil.
In October, the United States took a tougher stance on the sanctions against Russia and sanctioned two vessels for violating the price cap. A month later, the U.S. imposed sanctions on three maritime companies based in the UAE and three vessels owned by the companies for shipping Russian oil sold above the price cap.
The West is considering toughening up the sanction enforcement on evaders of the price cap on Russian oil, almost none of which now trades below the ceiling of $60 per barrel.
Russia has amassed a “shadow fleet” of tankers, which helps it ship its oil to international markets, mostly to Asia.
The U.S. is also looking “for ways to make that shadow fleet less effective,” Pyatt told FT.
Despite a 2% month-on-month decline, Russia’s export revenues from fossil fuels for October were the second-highest for 2023, with a notable rise in seaborne and pipeline crude, according to the latest monthly analysis by the Centre for Research on Energy and Clean Air (CREA).
In October, 48% of Russian crude oil and oil products were transported by tankers subject to the oil price cap policy. The rest – 52% -- were shipped by “shadow” tankers, CREA said.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.